Above the fold

Abdullah Gul has failed to win an outright majority in parliament to become Turkey’s president. Mr Gul, the foreign minister, won 341 votes in yesterday's first round, falling short of 367 needed to win in the first two rounds of the parliamentary vote. However, he is expected to win in the third round, as his Justice and Development party has a majority of seats in parliament.

The European Commission and Poland head for a showdown today over the future of the Gdansk shipyards, the birthplace of Solidarity movement that helped overthrow communism in Poland. The Polish government must present a restructuring plan by today to Brussels or run the risk of having to make the shipyard repay €51 million ($69 million) worth of subsidies.

The Financial Times reports that Germany is moving to scrap conscription, after the leader of the Social Democrats, the junior partner in the governing coalition, said military service should be voluntary. The SPD, have a confusingly-named alternative plan for “voluntary conscription”.

The German Bundesbank is in an optimistic mood, reporting yesterday that turmoil in global markets was no reason to dampen its upbeat economic assessment. However, in France, the economic outlook is gloomier. As bad news of a widening trade deficit and stagnant growth piled up, the finance minister, Christine Lagarde, expressed doubts about France’s ability to meet its stated 2.25% growth target for the year.

Peter Mandelson, the European trade commissioner, has dismissed claims from the Chinese government that action against toxic Chinese goods is protectionism in disguise. Mr Mandelson said it was “completely false” to suggest there was bias against China, adding it was "not a question of trade, but a question of health”.